The country India is a very diverse with its cultures and traditions. India can be identified for being one of the oldest historical backgrounds. The country has faced great hardship throughout history, yet it still today world's fourth largest economy in terms of purchasing power parity. The country has made tremendous growth from being one of the poorest countries in the world to being a growing economy. This country case project will focus on two terms periods between 1947-1990 and 1991 and today's time period. Factors that will be included in the country case project will be the country's Long Run Economic Growth, Business Cycles, Trade, Labor Markets, Exchange Rates, and Monetary Policies.

Long run economic growth is identifying the cause of governmental policies which will help the country in the future. The factors that include are income and poverty, capital, labor and total factors productivity, research and development and institution. The main problems in India is Poverty. Being the second most populated country in the world a huge percentage of the population is in poverty. Weak education system leads to many of the people to be forced to work in agriculture. In recent years India has grown rapidly and reduced poverty levels. India is one of the fastest growing economies. Poverty rate has drop from 36 percent in 1994 to 28 percent in 2005. The decrease in poverty rate happened because of monetary policy that was made by the Indian government. India growth during 1960 to 1980 grew about 1.5 percent per year which is marginally higher that the growth rate per capita income during that period of time. As time progressed and research and development by the government occurred, it was realized that many of the urban areas as well as rural areas were in poverty because weak education system. Today the government of India has made education a foundation for its future. The country has set up program where education is available to even the most rural areas. It also provided basic needs at low stable price throughout the 1980s. This increase income through pricing and as helped India in its economy. The basic needs were fulfill like clean water, education and health. It has also contributed in technology, creating better fertilizer for farming, better irrigation systems a potable water supply. Today India is considering one of the strongest economic countries which is due to its remarkable growth. India's research and development sectors are focused on Agriculture, Technology, Defense, Space Program and Health care. Agriculture accounts for 25 percent of total GDP in India. Organized sector of India consists of Private Corporation, Public Sector which accounts for 40 percent of India Workforce. The companies in India do no tend to invest within its own country. Infrastructures have also at times set up research and development department along with their investments. Infrastructure has increased within the years to 27 percent between 1971 and 2000s. India major infrastructure includes Electricity, Railway systems, Airports, Schools, and Factories. India has established itself as a leading IT industry and its growth has helped India create jobs. With all this growth India has been classified by the World Bank as a 'low income' country with Gross National Income equaling $450 billion. About 86 percent of the population lives under $2 per day and 44 percent lives under $1 per day. With all of this growth and setbacks India has proved to itself that it can grow steady and slow. India has been able to expand rapidly in growth and GDP.

Business Cycles 商业周期

Recessions and Booms are part of every country and many countries are faced with hardship and crisis. In India the country was faced with its worst recession in 1991. High oil prices around the world has affected major trading partners of India has been greatly affected by it. India is greatly affected by other countries. It was reported that 8 percent increase has occurred from 1985-1950 but as time went on into the 2000s, the booms have slightly increase but now seem to spiral down to 3%. These recessions and booms have increase and decrease the country ability to move forward. The problem that India faced during the late 1980's was liberalizing steps was taken that made an unprecedented growth for India. India suffer hyperinflation today through high oil prices. Inflation has hit all time high rate of 7 percent. India is taking all the necessary steps to reduce this high inflation.

Trade 贸易

In the 1980s-1990s India used to place tariffs on their major good and services. India was trying to promote free trade and it reduced its tariffs by 12.5 percent. The tariffs were help and protect the country farm based economy. India has become a very competitive with other countries in ASEAN. The tariffs cuts have double its trade with other countries within the ASEAN. India has been able to export 25 percent more than it used to. Trade with the US has provided India with $13billion surplus. India is eliminating trade barriers of goods between each other. Also with tariffs and barrier reduction, India has seen great progress. It has been predicted that by 2020 India will grow 35 percent. To accomplish this goal India has already began decreasing 8 percent tariffs to bordering countries to help improve its GDP. India has been involved in a global integration that helped economy prosper and is able to compete in the global market. Foreign trade goods in GDP have rose 13 percent in 1980 to 44 percent in 2000. During the 1980 unemployment was increased dramatically and it hurt India's economy. In 1970-1980, the Indian government did not make export its main priority. The Indian government believed that trade was biased against third world countries and that they were limited.

Labor Markets 劳动力市场

Labor Markets play a important role in the Indian Economy with the population reaching 1.6 billion and most of the country under poverty, the Unemployment rate during mid 1980s increased from about 6 per cent to 7.3 per cent in 1999-2000. India's is one of the major countries for outsourcing the US IT jobs. India has become the hub for Customer Service call centers for many business corporations. Outsourcing has created a new labor sector for India economy and it has played a important role for increasing the GDP per family. But with the job increase the problem of population also arises. With the increase in job market there is a parallel increase in the population growth which levels out the labor market and keeps the unemployment high. Compared to the 1980s to 2000s India has increased its Labor Force rate by 49%. Along with this large jump in the Labor Force the Unemployment also rose slightly. It was estimated that in the years 1992-2001, Unemployment has risen by 8 percent because of the rapid growth in population and standard of living.

Exchange Rates & Monetary Policies 汇率与货币政策

Before describing the monetary policy of India, there is another factor that has to be look upon and that is the role of the central bank. The central bank of India or the Reserve Bank of India (RBI) was established in April 1935 with a share capital of Rs. 5 crores and than nationalized in 1949. The basic functioning of the bank was constituted for the following need to regulate the issue of banknotes, to maintain reserves with a view to securing monetary stability and, to operate the credit and currency system of the country to its advantage. One of the developmental challenges for the Reserve Bank of India during 1980s through 1995 was to build a financial network with a wide geographical spread and deep socioeconomic reach. In 1990s India increased the money supply causing inflation to occur. With the exchange rate being flexible there was a lot of free capital movement which India could not keep up with. To attack this issue, Reserve Bank of India decided to change the policy from a flexible exchange rate to foreign exchange rate to maintain a stable exchange rate. At the same time the Reserve Bank of India sold securities to absorb liquidity so it would not weaken its restrictive monetary policy. It also allows the pressure of capital inflow to be absorbed helping the exchange rate to stabilize.

IMF 国际货币基金组织

Economics of Globalization has led India to integrate itself with the rest of the world. At times there were difficulties were India faced Recession and Booms and even with negative affects, globalization has brought, once a country that could not rule it self to one of the rising power in the economic world today. Throughout the years India has evolved from what it was during 1980s through 1990s, a country struggling to survive and keep up with the developing world, to a major outsourcing country throughout 2000 till nowadays and one of the leading exports in the world. Globalization played a main factor in helping India achieve its potential capabilities and will throughout the years; the Long Run Growth, Business Cycles, Labor Markets, Exchange Rates, and the Monetary Policy are few that were affected for the betterment of the country by globalization. Many statements have been made regarding globalization and its negative affects on countries but the negative affects are just a small investment on the benefits that a country acquires through globalization.